Integrity is key to leading a sustainable business15 Nov 2013
Richard Spencer, Head of Sustainability at ICAEW, explains why the role of CEOs and CFOs has changed
The role of the CEO and the CFO has changed, writes Richard Spencer, Head of Sustainability at ICAEW. To be an effective leader of a sustainable business it is necessary to be creative, inclusive and set the tone and standards of the business not only for the products and services, but for the employees and its purchase and supply chains.
Business leaders now recognise that sustainability is no longer just an aspect of risk management or a source of brand positioning and competitive advantage. It is vital for the growth and success of the economy. It is more than just doing the 'right thing' because it makes commercial sense, it means doing the 'right thing' because it makes sense morally and ethically.
The issue of ethics is a key part of running a successful sustainable business. Sustainability is inextricably connected with the concept of corporate citizenship. It is a business’s license to operate and thrive commercially, as well as take on responsibilities which extend to its engagement with stakeholders – the local community, employees and clients. It is a business’s duty to address the societal and environmental impacts. At its core, sustainability means future-proofing a business from market and environmental challenges.
A key factor of leading a sustainable business is the issue of integrity.
Integrity is a little-understood feature of organisations and the individuals they employ. Yet it is much desired. The public, customers and clients – they all expect businesses, organisations and individuals to act with integrity. Failure to meet these expectations can be detrimental. Crises and scandals from both the private and public sector are frequently blamed on a lack of integrity. However, what integrity is and how businesses, organisations and individuals can go about instilling, encouraging and acting with it, are questions about which there is widespread disagreement and confusion.
So, what is integrity? Having integrity involves speaking and acting consistently, based on certain ethical principles and commitments. It involves standing for something and is part of an individual’s identity. It entails openness, honesty and fairness. The responsibility to promote integrity ultimately falls to the CEO, the CFO, the board and business leaders. Research shows that tone from the top is absolutely critical for organisational integrity. The leaders must set out what is and isn’t acceptable behaviour and lead by example, in both words and actions.
Professional integrity also involves a commitment to the central values of the profession in question. Organisations have integrity if ethical attributes are in place – and if their members or employees, as a whole, are seen to have and act with integrity.
While all recognised professions, such as the accountancy profession (and its professional bodies and regulators) have an important role in promoting integrity among its membership, business leaders of all types should seek to encourage integrity as part of its sustainable responsibilities – and actively monitor it.
A sustainable business is also one that meets and anticipates the many challenges facing them. As the way we do business changes and the resources they are able to use get scarcer, or more costly, it is important to business to adapt and innovate. A truly sustainable business will create opportunities and techniques so that a business can survive without damaging the planet, exist within the society they operate and protect the needs of their employees.
This year’s ICAEW Sustainable Business Award was won by London Bio Packaging, with Anglian Water recognised as a Future Champion. To register your interest for this award in 2014, contact email@example.com.